Debt management for travelers

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How to pay down debt and travel in a post-pandemic world

Envision it now: COVID-19 case numbers are low enough that we’ve reached some semblance of “herd immunity.” You snagged a cheap flight to fill-in-beach-destination-here. Your closest friends are meeting you at the snazzy Airbnb. Sure, you’re still wearing a mask and washing your hands frequently, but it’s all almost too good to be true.

Well, if you’re paying for your trip with credit or otherwise paying down debt, maybe it is. But fear not, we’ve got advice for how to pay down debt while continuing to travel in the “new normal,” the “after times,” or whatever you’d like to call our post-pandemic world.

Pay for travel in cash, if you can

To avoid digging yourself further into debt, try to pay for your trips in cash up front. If you can’t afford to travel that way, you may want to reconsider the trip. Maybe there’s a more affordable vacation spot, or perhaps a road trip would be more doable than a flight.

Create—and stick to—a travel budget

Your travel budget will vary widely based on where you’re going and what your priorities are. Do you care more about accommodations, activities, or food? If you splurge on one, you’ll likely need to scale back on the others.

You can save by staying in hostels if you’re comfortable with that, rather than paying for a hotel or Airbnb. Often there are free events and activities to take advantage of in major cities. Do your homework ahead of time to see what you can do without spending a dime. If a Michelin Star restaurant doesn’t do anything for you, try the street food.

Just make sure you determine how much you’ll spend on different categories each day and stick to your budget.

Consider a personal loan

If you read that advice and had a few choice words, you’ll be happy to know there are other options. While your first inclination may be to pay for your travel with a credit card, you may want to instead consider a personal loan. Many personal loans can be used to pay for travel, and these loans tend to have lower interest rates than credit cards. Personal loans also come with fixed monthly payments and fixed loan terms, making it easier to budget how much you’ll need to allocate for repayment each month. Compare personal loan rates and find the best personal loan that fits your needs.

Use those miles you saved up while stuck at home

Between the increase in credit card use and digital payments and the decrease in travel because of COVID-19 restrictions, you may have managed to rack up quite a few rewards miles on your travel card.

If that’s the case, consider your travel rewards as a budget for your trip. If you can cover the cost of your flight and lodging with your miles, go for it. If not, maybe try racking up some more points before booking a trip. This way, you’re not piling on debt, and you can use the money you would’ve put toward your trip to pay down your debt instead.

For those who don’t already have a travel rewards card, now could be a good time to apply for one. These cards typically come with large signup bonuses, which could potentially be enough to fund a trip once you reach the spending threshold.

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